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Halton changes position to deal with credit unions By BRAD REAUME The Champion A t the closing bell of debate, Hait on Region agreed to accept financial guarantees issued through credit unions. This was an about-face a week after a council committee urged exactly the oppo- site. Wednesday council agreed to allow credit unions with at least $40 million in assets to issue letters of credit totaling $1 million, with no single credit union to have more than $100,000 in letter of credit guaran- tees. Letters of credit are required to guarantee construc- tion projects tendered by local goverment. The debate has bounced back and forth between Halton's administration and finance committee and council. Committee members were concerned with financial risk and refused to alter the current policy, which allows only 12 major banks to offer the finan- cial guarantees. Risk thought minimal However Halton council, which has the final word, saw the risks as minimal balanced against the need to support local small businesses and calls for fairness in a rapidly changing industry. "Joe Rinaldo (commissioner of corporate services) said the present policy has served you well," said Jim McDonnell, Credit Union Central of Ontario spokesman and retired manager of Oakville's Twin Oaks Credit Union. "So did the horse and buggy in its time."I Mr. McDonnell said by refusing to change the poli- cy Halton was making it clear it does not want to do business with local small firms. He pointed to several inconsistencies in a report on the issue, which suggest- ed many upper-tier municipalities do not accept letters of credit from credit unions. Milton Councillor Rick Malboeuf stressed the finan- cial viability of credit unions by asking if Halton Region accepts cheques from credit unions for tax payments. He asked if there is a limit on the amount of those cheques, and if staff had uncovered any instance when a letter of credit was not honoured by a credit union. Mr. Malbouef noted that if such a thing had been uncovered it would have been in the Halton staff report in bold print. According to Lorrie McKee, goverment relations officer with Credit Union Central of Ontario, needless complications in the understanding of credit unions "We're the human face of this corporation and we don't have to blindly folow staff. They don't run the Region." - KEVUN RYin probably led to the series of policy flip-flops. "We are very pleased. It's been a long process and a major learning curve for councillors," said Ms McKee. She added the message that local small busi- nesses are involved in credit unions was strong. Mr. McDonnell said he thinks the change in policy can be attributed to councillors who now better under- stand the credit union movement. No insurance money During the debate Burlington Councillor Linda Schreiber asked if Credit Union Central would deposit funds with Halton Region to guarantee the letters of credit, but Mr. McDonnell asked if Halton had the same requirement for the Royal Bank. He explained Credit Union Central of Ontario is a trade association similar to the Canadian Bankers Association. "You wouldn't ask the Canadian Bankers Association to put up guarantees for the Royal Bank would you?" he asked. Mr. Malboeuf jumped in to defend credit unions. "Halton Region doesn't guarantee the financial deal- ings of Halton Hills," he said. "Why do we need guar- antees from Credit Union Central?" Burlington Councillor John Taylor, who designed the new policy to accept guarantees from credit unions, said the financial institutions are putting up only one quarter of one per cent of their total assets as guarantees. For there to be a problem 10 credit unions would have to collapse, a situation which suggests far deeper financial problems would exist at all levels, he explained. Urging support for the new policy, Oakville Councillor Kevin Flynn said Halton staff were dug in on the issue and had blown the matter out of propor- tion. "The sky is not falling in municipalities which have agreed to take letters of credit from credit unions," he said. "This is about community. It's about local gov- emment accepting their own people's money. We're the human face of this corporation and we don't have to blindly follow staff. They don't mn the Region." 191 Main St. E. Milton Deadline June 11198 The Canadian Champion, Friday. .June 5 19U - 5 PERSON4AUZED WEIGHT MANAGEMENT i (gawteedWeight Loss ~ of 2 lbs. a weei Nutritionally Balanced Food Prograns i One-on One Counselling SSafe and Effective for all ages For a free consultation call: 550 Ontario St. S. 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